MEMPHIS, Tennessee (Reuters) - The U.S. unit of Japanese electronics giant Sharp Corp.(6753.T) said on Wednesday it will open its first overseas solar product assembly plant in January at its facility in Memphis, Tennessee.

Sharp, the world's largest solar battery maker, wants to create a production base in the United States, which lags Japan and Germany in solar power usage, to tap the potentially large market, said Ron Kenedi, General Manager of Sharp's U.S. Solar Division.

Sharp has been shipping assembled solar products from Japan to the United States, where it holds 10 percent of the market.

"We expect more than double-digit sales growth (in the U.S.), especially (in states) where (the) utility rate is high and state incentives are offered (to promote use)," Kenedi told Reuters.

These states include California, New York and Massachusetts, he added.

Sharp initially plans to invest about $3 million in the plant to make solar batteries that use silicon to convert sunlight into energy.

"The power shortage in California (in 2000 to 2001) sparked demand (for solar power). Western state governors are concerned about green and reusable energy," Kenedi said.

Sharp, with total annual sales of about two trillion yen, ($16.6 billion) held the largest share -- 19.2 percent -- of the world solar battery market in 2001.

In August, the company said it expected global sales of solar batteries to surge to 49 billion yen this year from 31.5 billion last year.

Sharp kicked off the solar battery business in Japan in the late 1950s when sun power became popular because of Japan's high electricity costs and lack of natural resources, Kenedi said.

Some 45 new jobs will be created at the Memphis facility when it kicks off the assembly of solar modules as early as March next year.

Sharp, which generates around 20 percent of its total revenue in the United States, said in August that it hoped overseas solar power sales would make up half of total solar battery sales by 2003/04 from the current 30 percent.

Kenedi referred to a report backed by the U.S. Department of Energy (news - web sites) projecting a more than 400 percent increase in the use of solar energy to some 80,000 households as an alternative to foreign oil.

The cost for solar power has also declined over the past three decades. The initial cost of setting up a solar unit for an average American home is roughly $8,000 to $9,000 before property exemptions and incentives, he said.

In August, Sharp declined to comment on the profitability of its solar battery business, but said the solar energy business had been helped by state subsidies.

Since 1994, the Japanese government has helped pay part of the cost of buying solar batteries to help promote their use, but growth could be put at risk if the country withdrew the subsidies.

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